Accounting Principles Assignment | College Homework Help

Application of Accounting Principles

Don't use plagiarized sources. Get Your Assignment on
Accounting Principles Assignment | College Homework Help
Just from $13/Page
Order Now

Read Case 11-3. Choose the best strategy and justify your decision based on appropriate accounting principles.

Submission Instructions:College Homework Help

  • Your initial post should be 200-300 words, formatted and cited in current APA style.
  • You should respond to at least two of your peers by extending, refuting/correcting, or adding additional nuance to their posts.

Classmate post 1

In order to establish which strategy is best, the profits generated under each one need to be computed. Profits are computed by a simple formula, in this case, Profit = Revenue – Variable Costs – Fixed costs. Firstly, revenue is calculated by multiplying anticipated sales price per unit by anticipated sales volume in units. Secondly, variable costs, which are costs that change accordingly to the activity base, are computed (variable cost per unit x anticipated sales volume in units). Thirdly, fixed costs, that are cost that remain the same whether the activity base changes, are to be estimated (production costs + anticipated advertising costs). Finally, profits for each strategy are determined given each set of data.

To sum up:

Profit = Revenue* – Variable Costs** – Fixed costs***

* Revenues = anticipated sales price per unit x anticipated sales volume in units

** Variable costs = variable cost per unit x anticipated sales volume in units

*** Fixed costs = production costs + anticipated advertising costs

The Do-Nothing strategy:

Profit = ($75 x $800,000) – ($45 x $800,000) – ($9,000,000 + $15,000,000)

Profit = $0

This indicates that 800,000 units is the break-even point for the new video game.

Dan Gillespie’s advice:

Profit = ($60 x $2,000,000) – ($45 x $2,000,000) – ($9,000,000 + $15,000,000)

Profit = $6,000,000

Haley Chipana’s strategy:

Profit = ($75 x 1,200,000) – ($45 x $1,200,000) – ($9,000,000 + $20,000,000)

Profit = $7,000,000

The “do-nothing” strategy would report neither income nor loss for Aquarius Games Inc. since 800,000 is the break-even point. Dan’s strategy of reducing the price would generate $6,000,000 in profits, and Haley’s would report $7,000,000. Therefore, the best strategy is Haley’s, due to the fact that it is the one reporting the highest profits, which consist in maintaining the price and increasing advertising costs.


Warren, Carl (2018). Survey of Accounting. Chapter 11 Cost-volume-profit-analysis. Pages 460,462,469

Classmate post 2

Application of Accounting Principles

Haley Chipana and Dan Gillespie, managers at Aquarius Games, are facing a dilemma. After the completion of a new game, Haley and Dan are seeking ways to increase the profitability of the game in order to break even with its advertising and production costs. Haley suggests increasing the advertising budget; Dan suggests that increasing the price is a better idea. It is important to note that profitability differs from profit. Profitability is relative and is a measure of efficiency while profit is an absolute and quantifiable measure, typically in a dollar amount (Horton, 2019).

Of the two options, Haley has a better strategy and a better overall understanding of the difference between profitability and profit, as well as accounting principles. For a new video game that will be entering the market, it would seem likely that dropping the price for greater visibility and awareness would be a good idea. However, in this case, a greater spend on advertising drums up the same awareness through paid media and earned media without losing sales numbers because of the lower price of the product. Based on accounting principles, Haley’s suggestion allows for financial statements to potentially reflect greater sales and greater revenue as its reporting will have had time for more advertisements to run. More advertisements can lead to greater awareness and more sales to be recorded on the financial statement.

Dan’s strategy is one that sacrifices actual profit to increase profitability. Lowering the cost of the game would ideally be smart, especially for price-sensitive customers, but the question is of increasing profitability rather than profit and sales. For a new game that is looking to get attention and visibility in the market, more advertising is the way to go as it gets the product in front of more eyes. It also allows marketers to make changes and fix errors that are typical in newer video games. Haley’s strategy of increasing advertising spend is a better strategy.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Social Work and Human Services
Thank you for the revision which was done timely and efficiently!
Customer 452703, January 23rd, 2020
Business and administrative studies
Be keen on plagiarism and grammar. Also, always follow the instructions' check-list.
Customer 453509, April 10th, 2022
Family and consumer science
Great effort.
Customer 462739, April 14th, 2022
IT, Web
The new writer was amazing and followed the instructions perfectly! Thank you so much for tackling all requirements on short notice and a HUGE thank you to the support team for remaining in contact with me until a resolution was received.
Customer 452455, January 13th, 2023
I would like to thank you for your hard work. The essay is clear and clean.
Customer 462687, March 14th, 2022
Healthcare & Medical
Good work
Customer 463469, October 22nd, 2022
Business and administrative studies
I had to make some updates but overall the paper was great. Will need to use this writer again for the next part.
Customer 453721, October 29th, 2022
Excellent. Thank you!
Customer 462787, August 23rd, 2022
Human Resources Management (HRM)
Customer 462613, April 10th, 2022
Instructions followed.
Customer 462823, April 13th, 2022
Entertainment & Gaming
Great work.
Customer 452441, April 29th, 2022
i really appreciate for the writer work for redoing my assignment on my request. Hopefully i will get atleast credit in this essay.
Customer 452967, April 3rd, 2020
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat